Mike Lofgren and the Deep State

Mike Lofgren is a Washington insider. He was a Republican congressional staff member for 28 years, including 16 years as a senior analyst on the House and Senate budget committees.

He has written a book, THE DEEP STATE: The Fall of the Constitution and the Rise of a Shadow Government, about governmental and private institutions that operate above the law, and independently of the will of the citizens, and how they interlock in ways that mutually reinforce their power.

The Deep State includes the bankers who were prosecuted for financial fraud because they were “too big to fail” and CIA torturers who were not prosecuted or dismissed because that would demoralize the agency.

It is the force that makes the government engage in bank bailouts, warrant-less surveillance and undeclared wars. It is the force that has made the American public accept endless war and economic stagnation as normal. It is the explanation of why partisan gridlock and financial sequesters never affect the availability of money to subsidize foreign military forces.

Lofgren’s Deep State includes President Eisenhower’s “military industrial complex”, the FBI, CIA and NSA and their supposed overseers in Congress and the federal courts, Wall Street and its supposed overseers in the Treasury and Justice departments, and Silicon Valley.

They work together, and have revolving doors through which people can move from one to another—for example, General David Petreaus, after his retirement from the military, to a seven-figure job at KKR, a Wall Street private equity form.

None of this is the result of a conscious conspiracy, Lofgren wrote. It is a natural evolution of power without accountability, and the “group-think” of people who never have their assumptions questioned.

During World War Two, Americans became accustomed to the idea that military secrets, covert action and large-scale military spending were necessary for national security. The Manhattan Project spent billions of dollars without the knowledge or authorization of Congress to develop the atomic bomb. During the Cold War, secrecy and lack of accountability came to be regarded as normal.

Silicon Valley was a product of the military-industrial complex. The Internet was originally created by the Defense Advanced Research Projects Agency (DARPA) to assure military communication in emergency. The U.S. semiconductor industry, like the U.S. aviation industry before it, grew because of military contracts.

MIke Lofgren

The Pentagon, CIA and NSA in turn depend on high technology to give them an edge. The most advanced computer and electronics systems in the USA are those used by the military, intelligence and surveillance industries.

That’s why the U.S. government spends heavily on research on electronics and software, on which Silicon Valley’s high tech industry depends, and why Silicon Valley executives are strong advocates for the military and the “intelligence community.”

The U.S. government spends more on its military than the next 10 countries combined. This has resulted in a strong armaments industry, one of the few industries in which the U.S. enjoys a strong balance of trade.

Much of the work that is done for the military and intelligence agencies is done by private contractors. such as Booz Allen, Edward Snowden’s former employers. Lofgren said there are more top secret clearances given to employees of private companies than to civilian civil servants.

Privatization creates opportunities for investment and lobbying, and also many jobs that are dependent on military and intelligence spending. All this reinforces the power of the military and intelligence agencies.

The Deep State also props up Wall Street, which has become increasingly detached from the real economy. Since the U.S. government no longer finances wars by raising taxes, it needs to be able to borrow money.

When Wall Street loses “confidence” in an administration, interest rates go up, and borrowing is not feasible—as President Bill Clinton found out when he took office. Right now the Federal Reserve System is holding interest rates down to near-zero, so this is not a problem for President Obama.

Wall Street’s power depends on the position of the U.S. dollar as the basic international currency, which gives U.S. investments an edge independent of the actual performance of American companies.

Back during the first OPEC oil embargo, Henry Kissinger made an agreement with the government of Saudi Arabia that the U.S. would protect the Saudi monarchy if the Saudis would deposit their oil revenues in American banks, and if it would buy its armaments from American companies.

This mutual dependence explains why the alliance between the United States and Saudi Arabia is so ironclad, and why the Pentagon continues to try to dominate the Middle East even though the bulk of U.S. oil imports no longer come from Persian Gulf countries.

Interestingly, both Iraq’s Saddam Hussein and Libya’s Muammar Qaddafi were contemplating selling Iraqi oil for currency other than dollars right before they were overthrown in 2003 NS 2011.

The State Department and CIA can call upon Wall Street to enforce economic sanctions against countries targeted by the U.S. government. Wall Street can call upon U.S. intelligence agencies to subvert foreign governments that don’t pay their debts. And both high-level intelligence officers and high-level bankers enjoy virtual immunity from prosecution.

As Lofgren pointed out, the American public suffers from all this. The money that goes into a worldwide military presence and bank bailouts is money that is not available for schools, hospitals, public roads, water and sewerage systems and investment in American manufacturing.

This is not something that can go on forever. Either the American people will rise up against it or the system will break down through its own excesses.